1. Field of the Invention
The present invention generally relates to affinity rewards granted to users of financial transaction cards and airline passengers, and more particularly to computer program products, systems, methods for facilitating political campaign contributions using such affinity rewards programs.
2. Related Art
Political Donations
In the United States, the Federal Election Commission administers and enforces the Federal Election Campaign Act (FECA) and its associated regulations, which limit the sources and amounts of the contributions used to finance federal elections. Under these complex rules, an individual is permitted to contribute limited amounts of money based on the Consumer Price Index (CPI) in a particular election cycle. In the current 2007-2008 election cycle, for example, an individual can contribute up to $2,300 to each candidate or candidate committee per election, and up to $28,500 to national party committees (e.g., the Democratic National Committee (DNC) or the Republican National Committee (RNC), etc.) per calendar year.
Contributions of cash (currency) which in the aggregate exceed $100 from one person are prohibited. Thus, contributions exceeding $100 must be made by check, money order or other written instrument. In addition to money, donated items and services, fundraising tickets and items, as well as loans and loan endorsements are also considered contributions and thus count against the limits described above.
In addition to federal regulations promulgated and enforced by the FEC, the states themselves commonly place limits on contributions to candidates, political action committees (PACs) and political parties. Only five states, Illinois, New Mexico, Oregon, Utah and Virginia, place no limits on contributions at all. Another eight states—Alabama, Indiana, Iowa, Mississippi, Missouri, North Dakota, Pennsylvania, and Texas—have minimal contribution limits.
Current campaign finance law at the federal level requires candidate committees, party committees and PACs to file periodic reports disclosing the money they raise and spend. Federal candidate committees must identify, for example, the names, occupations, employers and addresses of all individuals who give them more than $200 in an election cycle. Additionally, they must disclose expenditures to any individual or vendor. Similar reporting requirements exist in many states for state-wide and local candidates, and for PACs and party committees. Increasingly, political committees on all levels are required to electronically file campaign finance statements.
Political contributions for federal elections cannot be deducted for tax purposes. Similarly, most state revenue agencies do not permit deductions for state or federal political contributions. Also not deductible are contributions made to organizations that directly lobby for political parties or candidates.
Within the regulatory framework described above, there were an estimated 2.8 million “small donors” contributing to federal, state and local political campaigns and parties in 2004 (the last presidential election year). “Small donors” are defined as those individuals who donated less than $200 in a given year. In fact, the average small donor made a contribution of just $75 in light of the $2300 maximum contribution. Thus, there is a lot of room for growth in political donation dollars and contributors.
Transaction Accounts & Affinity Programs
A “transaction account,” as used herein, refers to an account associated with an open account or a closed account system (as defined below). The transaction account may exist in a physical or non-physical aspect. For example, a transaction account may be distributed in non-physical aspects such as an account number, frequent-flyer account, telephone calling account or the like. Furthermore, a physical aspect of a transaction account may be distributed as a financial transaction instrument.
A financial transaction instrument may be traditional “plastic” transaction cards, or other transaction cards such as credit, charge, debit, gift, pre-paid or stored-value cards, or any other like financial transaction instrument. Examples of such cards include the American Express®, Visa®, MasterCard® and Discover® cards, which are “open cards” and may be used at many different retailers and other businesses. In contrast, “closed cards” are financial transaction cards that may be restricted to use in a particular airline, particular store, a particular chain of stores or a collection of affiliated stores. One example of a closed card is a pre-paid gift card that may only be purchased at, and only be accepted at, a clothing retailer, such as The Gap® store.
With regard to use of a transaction account, users may communicate with merchants in person (e.g., at the ticket box office), telephonically, or electronically (e.g., from a computer via the Internet). During the interaction, the merchant may offer goods and/or services to the user. The merchant may also offer the user the option of paying for the goods and/or services using any number of available transaction accounts. Furthermore, the transaction accounts may be used by the merchant as a form of identification of the user. The merchant may have a computing unit implemented in the form of a computer-server, although other implementations are possible.
In general, transaction accounts may be used for transactions between the user and merchant through any suitable communication means, such as, for example, a telephone network, intranet, the global public Internet, a point of interaction device (e.g., a point of sale (POS) device, personal digital assistant (PDA), mobile telephone, kiosk, etc.), online communications, off-line communications, wireless communications, and/or the like.
Through use of the financial transaction instrument associated with a transaction account, the issuer of the financial transaction instrument may implement an affinity (or loyalty) program where “points”, “frequent flier miles” or other rewards or awards (collectively, “points”) are given the accountholder for using the instrument. Such points are typically redeemable for cash, prizes, free travel or discounts on merchandise and travel.
Affinity programs are essentially marketing programs designed to enhance brand loyalty by cultivating an ongoing relationship between a marketer and its customers. Loyalty programs encourage customers to buy frequently, to increase the amount spent each time, and to concentrate all or most of their related purchases on the brand offering the affinity program. Most affinity programs offer perks for membership in a club or program and reward purchases in such a way that it encourages behavior that is potentially of benefit to the issuer.
Typically, affinity programs issue a loyalty card, rewards card, points card, or club card that can be a plastic or paper card, visually similar to a financial transaction instrument such as a credit card, charge card, or debit card, that identifies the card holder as a member in the affinity program. Oftentimes, financial transaction instrument issuers associate their credit card or debit card with an affinity program without issuing a separate loyalty card, rewards card, points card, or club card. Examples of such affinity programs include airline frequent-flyer programs and credit card programs such as American Express's Membership Rewards® program with an estimated 9 million account holders, Bank of America's WorldPoints® program with an estimated 22 million account holders, Citibank's ThankYou Network® program with an estimated 22 million account holders, and Visa's Extras® program with an estimated 55 million account holders. (All estimates are as of January 2006.)
Studies have shown that 60-70% of the reward points awarded through these credit card-related affinity programs go unredeemed. This is true even though most of these affinity programs allow such points to be converted into cash (ranging from $0.002 to $0.008 per point). The cash value of these unredeemed points, in 2006, was estimated to be $2.13B. Further, in 2005, Economist magazine reported that frequent flyer miles toppled the U.S. dollar as the world's leading currency with some 14 trillion unredeemed miles worth over US$700B.
Given the foregoing, what is needed are systems, methods and computer program products for facilitating the redemption of affinity reward points as political contributions within the existing FECA statutory and regulatory framework described above.